Possible deal could cut ex-Enron CEO's sentence

View full sizeFormer Enron CEO Jeff Skilling, center right, arrives at the federal courthouse with his attorney, Daniel Petrocelli, center left, for his sentencing hearing in Houston in 2006. Skilling was convicted in 2006 on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of Houston-based Enron. He was sentenced to more than 24 years in prison. Associated Press file

HOUSTON -- A possible agreement that could reduce the
prison sentence of former Enron Corp. CEO Jeffrey Skilling for his role
in the collapse of the once mighty energy giant is being discussed,
according to the U.S. Justice Department.

The possibility of a sentencing agreement in the case was made public this week in a notice to victims of Enron's collapse.

"The
Department of Justice is considering entering into a sentencing
agreement with the defendant in this matter," the notice said. "Such a
sentencing agreement could restrict the parties and the Court from
recommending, arguing for, or imposing certain sentences or conditions
of confinement. It could also restrict the parties from challenging
certain issues on appeal, including the sentence ultimately imposed by
the Court at a future sentencing hearing."

The notice did not
specify how Skilling's sentence could be impacted if an agreement is
reached. Skilling has been in prison since December 2006. He is
currently serving his sentence in a low security facility outside of
Denver.

Former Enron
employee George Maddox, who lost $1.3 million in retirement savings when
the energy giant collapsed, said he doesn't think Skilling should have
his sentenced reduced.

"It would be OK with me if they would force
him to live on $2,400 a month like he has forced me to live," said
Maddox, 79, who lives in the East Texas town of Van, where he is
supporting his 16-year-old grandson and himself mainly on Social
Security income.

Maddox, who worked for 30 years as a plant manager with the company, said justice would be denied if a deal is reached.

"I think he should serve (his sentence) like any other common criminal," he said.

Before this week, Skilling's sentence was already in question.

Skilling
was convicted in 2006 on 19 counts of conspiracy, securities fraud,
insider trading and lying to auditors for his role in the downfall of
Houston-based Enron. He was sentenced to more than 24 years in prison.
The company collapsed into bankruptcy in 2001 under the weight of years
of illicit business deals and accounting tricks.

An appeals court
in 2009 upheld his convictions but vacated his 24-year prison term and
ordered that Skilling be resentenced, saying a sentencing guideline was
improperly applied, resulting in a longer prison term. He has yet to be
resentenced.

Philip Hilder, a Houston attorney who represented
several former Enron executives who cooperated with prosecutors, said if
an agreement is reached, he doubts it will result in Skilling's release
based on time served.

"I do think he will get a significant
reduction but I think he will still be incarcerated for the foreseeable
near future," said Hilder, whose clients included Sherron Watkins, who
famously warned Lay in late August 2001 that Enron could "implode in a
wave of accounting scandals."

However Matthew Orwig, a former U.S.
Attorney in East Texas now in private practice in Dallas, said he would
be surprised if an agreement would substantially change Skilling's
original sentence.

If a sentencing agreement is reached, U.S.
District Judge Sim Lake, who presided at the trial, would have to give
final approval.

In 2010, the Supreme Court said one of his
convictions was flawed when it sharply curtailed the use of the "honest
services" fraud law, and told a lower court to decide whether he
deserved a new trial. The lower court said no.

Skilling, 59, was
the highest-ranking executive to be punished for Enron's downfall.
Company founder Kenneth Lay's similar convictions were vacated after he
died of heart disease less than two months after trial.

Enron's
collapse put more than 5,000 people out of work, wiped out more than $2
billion in employee pensions and rendered worthless $60 billion in Enron
stock. Its aftershocks were felt across the city and the energy
industry.

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